þ | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Page No. | ||||
1 | ||||
FINANCIAL STATEMENTS: |
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2 | ||||
3 | ||||
4 | ||||
SUPPLEMENTAL SCHEDULE: |
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14 | ||||
15 | ||||
EXHIBIT: |
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16 | ||||
2008 | 2007 | |||||||
ASSETS |
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INVESTMENTS: |
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Defined Contribution Master Trust (Note 3) |
$ | 34,756,017 | $ | 56,609,365 | ||||
Participant Loans |
847,665 | 1,483,225 | ||||||
Total investments at fair value |
35,603,682 | 58,092,590 | ||||||
Adjustment from fair value to contract value
for interest in Defined Contribution Master Trust
relating to fully benefit-responsive investment contracts |
254,394 | (135,685 | ) | |||||
NET ASSETS AVAILABLE FOR BENEFITS |
$ | 35,858,076 | $ | 57,956,905 | ||||
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2008 | 2007 | |||||||
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR |
$ | 57,956,905 | $ | 90,440,805 | ||||
ADDITIONS: |
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Income from investments: |
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Interest in income of Defined Contribution Master Trust |
| 5,457,260 | ||||||
Interest on Participant Loans |
81,491 | 154,899 | ||||||
Total income from investments |
81,491 | 5,612,159 | ||||||
Contributions: |
||||||||
Employer |
624,195 | 552,430 | ||||||
Employee |
1,689,173 | 1,602,306 | ||||||
Total contributions |
2,313,368 | 2,154,736 | ||||||
Total additions |
2,394,859 | 7,766,895 | ||||||
DEDUCTIONS: |
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Loss from investments: |
||||||||
Interest in loss of Defined Contribution Master Trust |
11,569,838 | | ||||||
Payments to participants or beneficiaries (Note 6) |
9,633,763 | 39,456,698 | ||||||
Administrative expenses |
36,754 | 51,103 | ||||||
Total deductions |
21,240,355 | 39,507,801 | ||||||
NET DECREASE BEFORE TRANSFERS |
(18,845,496 | ) | (31,740,906 | ) | ||||
NET TRANSFERS BETWEEN AFFILIATED PLANS |
(3,253,333 | ) | (742,994 | ) | ||||
NET DECREASE |
(22,098,829 | ) | (32,483,900 | ) | ||||
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR |
$ | 35,858,076 | $ | 57,956,905 | ||||
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1. | DESCRIPTION OF THE PLAN |
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The following brief description of the Rockwell Automation Retirement Savings Plan for Hourly
Employees (the Plan) is provided for general information purposes only. Participants should
refer to the Plan document for more complete information. |
a. | General - The Plan is a defined contribution savings plan sponsored by Rockwell
Automation, Inc. (Rockwell Automation). The Rockwell Automation Employee Benefit Plan
Committee and the Plan Administrator control and manage the operation and administration
of the Plan. Fidelity Management Trust Company (the Trustee) is the trustee of the
Rockwell Automation, Inc. Defined Contribution Master Trust (the Master Trust). The
assets of the Plan are managed by the Trustee and several other investment managers. The
Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974
(ERISA). |
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Participants in the Plan may invest in a suite of twelve lifestyle mutual funds, nine core
investment options and a mutual fund brokerage option. In addition, the Rockwell
Automation Stock Fund was available in 2008 and 2007 and is specific to the Plan. |
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Effective June 29, 2007, Rockwell Automation removed the Exxon Mobil Stock Fund, a closed
stock fund, as an investment option. If a participant did not take action by June 29,
2007, the participants investment in the Exxon Mobil Stock Fund, if any, was
automatically transferred to a Fidelity Freedom Fund based on the participants date of
birth. |
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b. | Participation - The Plan provides that eligible employees electing to become
participants may contribute up to a maximum of 25% of base compensation, as defined in the
Plan document. Participant contributions can be made either before or after United States
federal taxation of a participants base compensation. However, pre-tax contributions by
highly compensated participants are limited to 12% of the participants base compensation.
In addition, highly-compensated participants may contribute up to an additional 4% on an
after-tax basis. |
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Rockwell Automation contributes an amount equal to 50% of the first 6% of base
compensation contributed by the participant. (See Note 10) Rockwell Automation
contributions are made to the Rockwell Automation Stock Fund. Participants may elect to
transfer a portion or all of their holdings in the Rockwell Automation Stock Fund to one
or more of the other investment funds. |
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c. | Investment Elections - Participants may contribute to any or all of the funds that
are available for contributions in 1% increments. Participants may change such investment
elections on a daily basis. If a participant does not have an investment election on
file, contributions are made to one of the Fidelity Freedom Funds, based on the
participants date of birth. |
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d. | Unit Values - Participants do not own specific securities or other assets in the
various funds, but have an interest therein represented by units valued as of the end of
each business day. However, voting rights are extended to participants in proportion to
their interest in each stock fund and each mutual fund, as represented by common units.
Participants accounts are charged or credited for Plan earnings or loss from investments,
as the case may be, with the number of units properly attributable to each participant. |
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e. | Vesting - Each participant is fully vested at all times in the portion of the
participants account that relates to the participants contributions and earnings
thereon. Rockwell Automations matching contributions and earnings are vested after the
participant has completed three years of vesting service. |
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f. | Loans - A participant may obtain a loan in an amount as defined in the Plan document
(not less than $1,000 and not greater than the lower of $50,000, reduced by the
participants highest outstanding loan balance during the 12 month period before the date
of the loans, or 50% of the participants vested account balance less any outstanding
loans) from the balance of the participants account. Loans are secured by the remaining
balance in the participants account. Interest is charged at a rate equal to the prime
rate plus 1% at inception date of the loan. The loans can be repaid through payroll
deductions over terms of 12, 24, 36, 48 or 60 months, or up to 120 months for the purchase
of a primary residence, or repaid in full at any time after a minimum of one month.
Payments of principal and interest are credited to the participants account.
Participants may have up to two outstanding loans at any time from the Plan. |
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g. | Forfeitures - When certain terminations of participation in the Plan occur, the
nonvested portion of the participants account represents a forfeiture, as defined in the
Plan document. Forfeitures remain in the Plan and subsequently are used to reduce
Rockwell Automations contributions to the Plan in accordance with ERISA. However, if the
participant is re-employed with Rockwell Automation and fulfills certain requirements, as
defined in the Plan document, the participants account will be restored. As of December
31, 2008 and 2007, forfeited nonvested accounts totaled $68,189 and $68,314, respectively.
During the years ended December 31, 2008 and 2007 Rockwell Automations contributions
were reduced by $13,898 and $25,625, respectively, from forfeited nonvested accounts. |
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h. | Plan Termination - Although Rockwell Automation has not expressed any current intent
to terminate the Plan, Rockwell Automation has the authority to terminate or modify the
Plan and to suspend contributions to the Plan in accordance with ERISA. If the Plan is
terminated or contributions by Rockwell Automation are discontinued, each participants
employer contribution account will be fully vested. Benefits under the Plan will be
provided solely from Plan assets. |
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i. | Withdrawals and Distributions - Active participants may withdraw certain amounts up
to their entire vested interest when the participant attains the age of 59-1/2. Active
participants also may withdraw certain amounts when financial hardship is demonstrated.
Participant vested amounts are payable upon retirement, death or other termination of
employment. |
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j. | Expenses - Plan fees and expenses, including fees and expenses associated with the
provision of administrative services by external service providers, are paid from Plan
assets. |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
a. | Valuation of Investments - The Plan has an interest in the net assets of the Master
Trust. The net assets of the Master Trust are stated at fair value. Benefit responsive
investment contracts held in the Master Trust are then adjusted and stated at contract
value. Investment contracts held by a defined contribution plan are required to be
reported at fair value. However, contract value is the relevant measurement attribute for
that portion of the net assets available for benefits of a defined contribution plan
attributable to fully benefit-responsive investment contracts because contract value is
the amount participants would receive if they were to initiate permitted transactions
under the terms of the plan. The Plan invests in investment contracts through a common
collective trust (the Stable Value Fund) held by the Master Trust. The Statements of
Net Assets Available for Benefits present the fair value of the investment in the common
collective trust as well as the adjustment of the investment in the common collective
trust from fair value to
contract value relating to the investment contracts. The Statements of Changes in Net
Assets Available for Benefits are presented on a contract value basis. |
- 5 -
Purchases and sales of securities are recorded on a trade date basis. Interest income is
recorded on an accrual basis. Dividends are recorded on the dividend payable date.
The loan fund is stated at cost, which approximates fair value. |
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b. | Fair Value Measurements - Effective January 1, 2008, the Plan adopted Statement on
Financial Accounting Standards No. 157 (SFAS No. 157), Fair Value Measurements. SFAS No.
157 established a single authoritative definition of fair value, sets a framework for
measuring fair value and requires additional disclosures about fair value measurement. |
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SFAS No. 157 establishes a framework for measuring fair value. That framework provides a
fair value hierarchy that prioritizes the inputs to valuation techniques used to measure
fair value. The hierarchy gives the highest priority to unadjusted quoted prices in
active markets for identical assets or liabilities (level 1 measurements) and the lowest
priority to unobservable inputs (level 3 measurements). The three levels of the fair
value hierarchy under SFAS No. 157 are described below: |
| Quoted prices for similar assets or liabilities in active
markets; |
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| Quoted prices for identical or similar assets or liabilities in
inactive markets; |
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| Inputs other than quoted prices that are observable for the asset
or liability; |
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| Inputs that are derived principally from or corroborated by
observable market data by correlation or other means. |
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Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Participant Loans |
$ | | $ | | $ | 847,665 | $ | 847,665 |
Participant | ||||
Loans | ||||
Balance, beginning of year |
$ | 1,483,225 | ||
New loans issued, interest earned and
repayments-net |
(635,560 | ) | ||
Balance, end of year |
$ | 847,665 | ||
c. | Use of Estimates - Estimates and assumptions made by the Plans management affect the
reported amount of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of increases
and decreases to Plan assets during the reporting period. Actual results could differ
from those estimates. |
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d. | Payment of Benefits - Benefits are recorded when paid. |
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e. | Risks and Uncertainties - The Plan invests in various investments. In general,
investments are exposed to various risks, such as interest rate, credit and overall market
volatility. Due to the level of risk associated with certain investments, it is
reasonably possible that changes in the values of certain investments will occur in the
near term and that such changes could materially affect the amounts reported in the
financial statements. |
3. | MASTER TRUST |
|
At December 31, 2008 and 2007, with the exception of the participant loan fund, all of the
Plans investment assets were held in the Master Trust account at the Trustee. Use of the
Master Trust permits the commingling of the trust assets of a number of benefit plans of
Rockwell Automation and its subsidiaries for investment and administrative purposes. Although
assets are commingled in the Master Trust, the Trustee maintains supporting records for the
purpose of allocating the net earnings or loss of the investment accounts to the various
participating plans. |
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The Master Trust investments are valued at fair value at the end of each day. If available,
quoted market prices are used to value investments. If quoted market prices are not available,
the fair value of investments is estimated primarily by independent investment brokerage firms
and insurance companies. |
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The net earnings or loss of the accounts for each day are allocated by the Trustee to each
participating plan based on the relationship of the interest of each plan to the total of the
interests of all participating plans. |
- 7 -
2008 | 2007 | |||||||
Money market fund |
$ | 18,843,528 | $ | 23,063,651 | ||||
Cash |
19,928,284 | 1,796,220 | ||||||
Common stocks |
425,956,165 | 881,455,840 | ||||||
Mutual funds |
631,823,559 | 1,055,461,542 | ||||||
Brokeragelink account |
11,040,114 | 12,534,606 | ||||||
Corporate debt investments |
10,117,956 | 12,163,005 | ||||||
Asset and mortgage backed securities |
21,014,503 | 26,007,956 | ||||||
U.S. government securities |
2,987,820 | 8,582,508 | ||||||
Other fixed income investments |
2,274,822 | 2,040,283 | ||||||
Investments in common collective trusts: |
||||||||
Fidelity U.S. Equity Index Commingled Pool |
69,213,365 | 116,859,596 | ||||||
Mellon Rockwell EB Daily Fund |
14,826,301 | | ||||||
Stable Value
Fund - guaranteed investment contracts |
535,052,749 | 514,626,720 | ||||||
Total investments at fair value |
1,763,079,166 | 2,654,591,927 | ||||||
Accrued income |
21,929 | 1,063,715 | ||||||
Accrued fees |
(515,429 | ) | (905,965 | ) | ||||
Pending trades (net) |
529,099 | (970,517 | ) | |||||
Net assets at fair value |
1,763,114,765 | 2,653,779,160 | ||||||
Adjustment from fair value to contract value
for fully benefit-responsive investment contracts |
7,582,493 | (3,233,648 | ) | |||||
Net assets |
$ | 1,770,697,258 | $ | 2,650,545,512 | ||||
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Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Money market fund |
$ | | $ | 18,843,528 | $ | | $ | 18,843,528 | ||||||||
Cash |
19,928,284 | | | 19,928,284 | ||||||||||||
Common stock |
425,956,165 | | | 425,956,165 | ||||||||||||
Mutual funds |
631,823,559 | | | 631,823,559 | ||||||||||||
Brokeragelink
accounts |
11,040,114 | | | 11,040,114 | ||||||||||||
Corporate debt |
10,117,956 | | | 10,117,956 | ||||||||||||
U.S. government
securities |
2,987,820 | | | 2,987,820 | ||||||||||||
Asset and mortgage
backed securities |
| 21,014,503 | | 21,014,503 | ||||||||||||
Other fixed income
investments |
| 2,274,822 | | 2,274,822 | ||||||||||||
Common collective
trusts |
| 84,039,666 | 535,052,749 | 619,092,415 | ||||||||||||
Total Master Trust
Investments |
$ | 1,101,853,898 | $ | 126,172,519 | $ | 535,052,749 | $ | 1,763,079,166 | ||||||||
Common collective trust - | ||||
Stable Value Fund | ||||
Balance, beginning of year |
$ | 514,626,720 | ||
Change in adjustment to fair value from contract value |
(10,816,141 | ) | ||
Purchases, sales, issuances, and settlements, net |
31,242,170 | |||
Balance, end of year |
$ | 535,052,749 | ||
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2008 | 2007 | |||||||
Interest |
$ | 24,027,047 | $ | 25,534,526 | ||||
Dividends |
42,879,373 | 65,888,256 | ||||||
Net (depreciation) appreciation in fair value of investments: |
||||||||
Common stocks |
(347,052,254 | ) | 109,393,501 | |||||
Mutual funds |
(413,135,136 | ) | 23,257,042 | |||||
Debt investments |
(6,057,328 | ) | 2,394,752 | |||||
Investment in common collective trust -
|
||||||||
Fidelity U.S. Equity Index Commingled Pool
|
(41,626,484 | ) | 7,632,374 | |||||
Mellon Rockwell EB Daily Fund |
780,146 | | ||||||
Brokeragelink accounts |
(5,414,903 | ) | 1,381,768 | |||||
Net investment (loss) income |
$ | (745,599,539 | ) | $ | 235,482,219 | |||
- 10 -
Description of Investment | 2008 | 2007 | ||||||
Stable Value Fund |
$ | 535,052,749 | $ | 514,626,720 | ||||
Rockwell Automation, Inc. common stock |
169,637,079 | 345,824,056 | ||||||
Fidelity International Discovery Fund |
90,682,644 | 193,810,010 | ||||||
Fidelity Freedom 2020 Fund |
96,985,757 | 155,557,645 |
4. | NON-PARTICIPANT DIRECTED INVESTMENTS |
|
Information about the net assets and the significant components of the changes in net assets
relating to the non-participant directed investments in the Rockwell Automation Stock Fund for
the year ended December 31, 2008 and 2007 is as follows: |
2008 | 2007 | |||||||
Net Assets, Beginning of Year* |
$ | 9,098,705 | $ | 14,167,252 | ||||
Changes in net assets: |
||||||||
Contributions |
634,987 | 577,036 | ||||||
Dividends |
130,167 | 196,372 | ||||||
Net (depreciation) appreciation |
(4,090,704 | ) | 1,363,807 | |||||
Benefits paid to participants |
(967,045 | ) | (5,273,150 | ) | ||||
Administrative expenses |
(5,951 | ) | (12,743 | ) | ||||
Transfers (Note 6) |
(1,523,088 | ) | (1,919,869 | ) | ||||
Total changes in net assets |
(5,821,634 | ) | (5,068,547 | ) | ||||
Net Assets, End of Year* |
$ | 3,277,071 | $ | 9,098,705 | ||||
* | These net assets are included in the Master Trust. |
5. | TAX STATUS |
|
The Internal Revenue Service has determined and informed Rockwell Automation by letter dated
October 3, 2002, that the Plan and related trust are designed in accordance with applicable
sections of the Internal Revenue Code of 1986, as amended (the IRC). The Plan has been
amended since receiving the determination letter. The Plan Administrator believes that the Plan
is currently designed and is being operated in compliance with the applicable provisions of the
IRC and the Plan continues to be tax-exempt. Therefore, no provision for income taxes has been
included in the Plans financial statements. |
- 11 -
6. | PARTICIPANT WITHDRAWALS |
|
Effective January 31, 2007, Rockwell Automation sold the Dodge mechanical and Reliance Electric
motors and motor repair services businesses. As a result of the sale, all employees of the
divested businesses were terminated and those not fully vested in the Plan were considered to be
100% vested upon termination. These former employees took distributions totaling $33,620,400
and are included in Payments to participants or beneficiaries in the 2007 Plan financial
statements. |
Effective November 7, 2007, retirees and former employees are limited to holding 15% of the
total fair value of their account in the Rockwell Automation Stock Fund. Participants have an
option to transfer funds out of the Rockwell Automation Stock Fund. Effective November 7, 2007,
all balances exceeding the 15% limit were automatically transferred into a temporary account
(the Liquidation Fund), and later, in a phased approach, reallocated into a Fidelity Freedom
Fund based on participants date of birth. The reallocation into the Fidelity Freedom Funds was
completed on December 11, 2007 and totaled $526,178. |
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7. | PLAN CHANGES |
|
In November 2007, the Plan was amended to provide that any participant who is not an active
employee would be limited to holding 15% of his or her total fair market account balance under
the Plan in the Rockwell Automation Stock Fund. Each year, on or prior to June 30, any amount
that exceeds 15% of the total fair value will be automatically reallocated for participants who
were not active employees as of the preceding December 31. The amount in excess of the limit
will be liquidated and automatically transferred to a Fidelity Freedom Fund based on the
participants date of birth. |
||
8. | RELATED-PARTY TRANSACTIONS |
|
Certain Master Trust investments are shares of mutual funds managed by Fidelity Management
Trust Company. Fidelity is the trustee and recordkeeper as defined by the Master Trust;
therefore, these transactions qualify as party-in-interest transactions. Fees paid by the
Master Trust for investment management services were included as a reduction of the return
earned on each fund. |
||
At December 31, 2008 and 2007, the Master Trust held 5,261,696 and 5,014,850 shares,
respectively, of common stock of Rockwell Automation, the sponsoring employer, with a cost
basis of $64,648,703 and $40,352,482, respectively, and a fair value of $169,637,079 and
$345,824,056, respectively. |
||
During 2008 and 2007, dividends on Rockwell Automation common stock paid to eligible plan
participants were $5,943,623 and $9,566,729, respectively. |
- 12 -
9. | RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 |
|
Reconciliation of net assets available for benefits reported in the financial statements to the
net assets reported on line 1(l) of the 2008 Form 5500 Schedule H, Part I is presented below. |
2008 | 2007 | |||||||
Net assets available for benefits reported in
the financial statements |
$ | 35,858,076 | $ | 57,956,905 | ||||
Adjustment from contract value to fair value
for interest in Master Trust
relating to fully benefit-responsive investment contracts |
(254,394 | ) | 135,685 | |||||
Net assets available for benefits reported on Form 5500 |
$ | 35,603,682 | $ | 58,092,590 | ||||
2008 | ||||
Interest in loss of Master Trust
reported in the financial statements |
$ | 11,569,838 | ||
Adjustment from contract value to fair value
for interest in Master Trust relating to
fully benefit-responsive investment contracts |
390,079 | |||
Net investment loss from master trust investment accounts
as reported on Form 5500 |
$ | 11,959,917 | ||
10. | SUBSEQUENT EVENT |
|
In April 2009, Rockwell Automation amended the Plan to suspend the matching contribution for the
period of April 24, 2009 through September 30, 2009, Rockwell Automations fiscal year end. |
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Column A | Column B | Column C | Column D | Column E | ||||||||
Description of Investment | ||||||||||||
Identity of Issuer, | Including Collateral, Rate | |||||||||||
Borrower, Lessor | of Interest, Maturity Date, | Fair | ||||||||||
or Similar Party | Par or Maturity Value | Cost | Value | |||||||||
* |
Fidelity Management Trust Company |
Defined Contribution Master Trust |
$ | 38,808,186 | $ | 34,756,017 | ||||||
* |
Various participants | Participant Loans; rates ranging between 5% and 10.5%, | ||||||||||
due 2009 to 2017 | 0 | 847,665 | ||||||||||
Total assets (held at end of year) | $ | 38,808,186 | $ | 35,603,682 | ||||||||
* | Party-in-interest. |
- 14 -
By
|
/s/ Teresa E. Carpenter
|
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Plan Administrator |
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